Under SKG, the new title would effectively be forced to compete with the old despite the fact that the IP holder doesn't want that.
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Publishers shouldn't be able to erase existing games consumers have purchased so that new games don't have to compete with them. That's the equivalent of Disney confiscating all DVDs of the Sam Raimi Spider-Man trilogy and destroying them so that the new MCU movies don't have to compete.
If their new products aren't good enough to compete with the old, tough shit. Not an excuse to confiscate and destroy what consumers already paid for.